The New Revolution in the Indian Logistics Industry: Unified Logistics Interface (ULI)
India's government released its National Logistics Policy and Unified Logistics Interface in September 2022. Similar to how UPI revolutionised the payment sector in India, ULI is anticipated to revolutionise all aspects of logistics, including road, rail, sea, and air transportation. This might be the best thing that has ever happened to the highly fragmented and disorganised, several billion dollar industry. India currently has relatively higher logistics costs than the majority of other developed economies; these costs comprise 13–14% of GDP. According to the World Bank's Logistics Performance Index, which ranks nations according to their logistics performance, India was ranked 44th in the world in 2018. This article will discuss in detail how logistics work in India, how the National Logistics Policy addresses current problems, and how it benefits the Indian economy.
Hurdles in the current logistics industry:
The logistics industry Transport costs are the biggest barrier India has to overcome out of all the other types of obstacles it faces. According to statistics from 2022, it will cost approximately 18 rupees, 3.6 rupees by road, and 1.6 rupees by rail to transport one metric tonne of goods across India. Railroads are the least effective of the three methods.
You might think that the ability to transport goods by rail comes from the fact that it is more affordable. What makes it challenging?
Now the issue appears. Railways favour passenger trains over freight trains, and there is a very small supply of trains compared to demand. For first and last mile connectivity using rail, we must use multiple modes of transportation; in other words, you must transfer your product from the factory to the truck, then unload and reload it to get the goods to the appropriate location, then return it to the warehouse, which is a laborious process.
India lacks the infrastructure necessary to transport goods from truck to train, and the punctuality of the arrival is in question. Furthermore, there are concerns about the security of railroad freight. Before continuing onto the waterways, numerous certifications and documentation procedures from various government departments are required.
The majority of businesses choose road transportation because it allows for easy movement of trucks from point A to point B. There are issues on the roads as well. The trucks travel 15 days a month while carrying all of their cargo. Think about a truck transporting goods from Nagpur to Chennai. Due to poor networking, it takes a long time to get a proper reload to Nagpur after arriving in Chennai. The trucks eventually return to Nagpur empty as a result of these gaps. These are some of the difficulties with logistics in India that we face.
National Logistics Policy
The Government of India came up with the National Logistics Policy as a solution to get around these challenges. Our logistics sector currently employs a point-to-point model, which is hectic and has more problems during the implementation stage. The Hub and spoke model is a technique that the National Logistics Policy introduced. Let's examine the model's operation.
Take four significant cities. Bangalore, Salem, Kochi, and Chennai. Let's fix Salem as a hub using the hub and spoke design. Where the goods from Bangalore, Chennai, and Kochi are concentrated in the Salem hub, while the goods from the other three cities are divided there, and the trucks will pick up a good load on their way back home, this model helps to reduce costs and also aids in getting the filled load on the return too. We can now transport the goods using only 4 trucks, as opposed to 8 trucks previously. Although this system appears to be a good idea on paper, its implementation requires significant infrastructure development and exceptionally high levels of management.
Unified Logistics Interface Platform (ULIP), an integrated digital system for logistics services, is used to carry out higher level structured operations. Here, all the stakeholders will be integrated into a single, unified interface that will allow them to manage and track their products.
Nearly 35 Multi Model Logistics Parks similar to Salem are planned for construction throughout the nation; they will serve as hubs for freed aggregation, distribution, storage, and warehousing. The Indian government is creating a Super application that will allow traders and customers to track goods and check the availability of trucks and rails with a single click in order to consolidate these operations into one location. Since the majority of truck drivers are from villages and only speak regional languages, the application has been created in all of these languages.
Then I'll conclude.
All of the ministries are connected through the Unified Logistics Interface to make the process of obtaining authorizations and certifications simple. If this process is implemented successfully, intermediate logistics costs will decrease from 14% of GDP to less than 10%, making Future India the leader in the logistics sector.
Also read our article: https://blog.skillsafari.in/the-new-revolution-of-indian-healthcare-unified-health-interface-uhi